Government data hints at future challenges for curbing gas demand

Gas plays an essential role in the UK’s energy
mix, providing heat for homes and electricity to sockets. While
that’s not likely to change in the short term, the fuel will need
to be increasingly phased out as the government seeks to
decarbonise the energy sector.

A trawl through new government
data shows how far the UK’s come in recent
years, and hints at challenges to come.

Gas trends

The UK currently uses three trillion cubic feet of gas each
year. That demand may need to fall by as much as
20 per cent over the next two decades if the UK is going to hit
its
2020 climate target.

DECC’s data shows gas demand has fallen 17 per cent in the last
five years. But while demand has fallen significantly from 2011’s
high, its plateaued in recent years. Demand was only one per cent
lower in 2013 compared to a year before.

Gas is mainly used for two things, as the blue and purple
sections of the graph below show: generating electricity, and
heating people’s homes.

DECC’s data shows gas is being used
increasingly sparingly to generate electricity. The amount of gas
used in electricity generation fell by 13 per cent last year. But
that doesn’t necessarily spell good news for the UK’s emissions.

As the graph below shows, while gas generation is dropping, coal
power is being ramped up. And Coal power has almost twice the
emissions of gas.

That’s why some people, including prime minister David Cameron,
are keen to promote gas as a
transition fuel while the UK seeks to wean itself off coal
power and onto renewable electricity. But the UK’s official
advisor, the Committee on Climate Change (CCC), has
warned against an all-out “dash for gas”.

In 2012, the government released a strategy outlining three
scenarios for the future of gas power. The strategy suggests
between 26 and 37 gigawatts of new gas capacity could be built
by 2030. The former would mean the government hits its legally
binding emissions reduction goals, the CCC says. The latter means
the target would probably be
missed, it warns.

Curbing households’ demand for gas heating is an altogether
trickier business, as it largely relies on the weather. DECC’s data
shows that people reaching for the thermostat during particularly
cold years can lead to around 50 terrawatt hours of additional gas
demand. The government hopes its energy efficiency scheme – the Green
Deal – will help curb such spikes, though the programme has had
a
troubled start.

Cleaner imports

Where the UK’s gets its gas also has an impact on emissions.

The UK imports most of its gas, as domestic production continues
to decline. Gas is imported in two ways: through pipelines
connected to Ireland and Europe, and as Liquefied Natural Gas
(LNG).

Government research shows the production and transportation of
LNG can emit significantly more than gas piped from the
continent.

The good news is that the UK is importing a lot less LNG than it
once was, as the purple chunk on the graph below shows. At its
height, the UK LNG accounted for 47 per cent of the UK’s gas
imports (in 2011). In 2013, that was down to 20 per cent.

That’s partly because pipelines connected to Norway and Belgium
were back up and running after
maintenance works – hence the upward trajectory of the pink and
purple lines on the graph below. It’s also because demand for LNG
has spiked in Asia, and particularly in Japan after it shut down
its nuclear power stations, driving the LNG price up.

As a consequence, the UK’s main LNG supplier, Qatar, is sending
increasing amounts of LNG south east rather than to the UK, which
isn’t willing to match Asia’s price. In 2013, 62 per cent
of Qatar’s LNG was exported to Asia, with only 30 per cent going to
Europe.

If the UK is going to use gas as a bridging fuel while curbing
its emissions, it will need to continue to import as much as
possible from the continent rather than alternative sources.
Shale gas could potentially play a role, but only if
fugitive methane emissions are constrained. Finding alternative
low emission gas sources will get ever more pressing as
North Sea wells dry up and Norway’s resources become increasingly
depleted.

Reducing dependency

In its
big climate report released earlier this year, the
Intergovernmental Panel on Climate Change said natural gas could
play a role in the decarbonisation effort – but only
in a controlled way. Gas could be a substitute for
higher-emitting coal, as long as emissions from the energy sector
shrink rapidly throughout this century, it suggests.

The UK government already has a number of policies it hopes will
help wean the UK off gas.

Households can install a range of
energy efficiency measures under the Green Deal scheme – such
as more efficient boilers and insulation – which should help cut
domestic gas demand. Though improvements have slowed compared to
the
scheme’s predecessor.

The government is also committed to ramping up renewable
electricity generation which, combined with energy
storage and
interconnectors to the continent, should reduce the number of
hours fossil fuel plants need to operate.

If the UK is going to hit its climate targets, such
policies will need to ensure gas demand decreases in the long run
without more-polluting energy sources filling the
gap.